JK Ind seeks concessions for expansion of Banmore unit in MP

JK Industries, which is expanding the capacity of its Banmore facility near Gwalior in Madhya Pradesh, today reportedly tried to seek concessions from the MP government.

Raghupati Singhania, vice-chairman and managing director of the company today called on chief minister, a chief minister residence source told BS adding, "His (Singhania's company) is expanding in the state and the discussion this morning was in this regard."

Earlier during 2005 the company had demanded some sops and concessions for its capacity expansion.

"The company had approached Apex Empowered Committee on Investment for concessions and sops for its Rs 86 crore expansion but the proposal was put on backburner by the committee since Industry Policy 2004 provisions did not permit it. But the matter is under consideration since the policy is being amended," said another government source.

The chief minister's house source told Business Standard, "The company has been asked to file the proposal afresh. The Project Implementation and Clearance Board may decide on it." Singhania or the company officials could not be contacted.

Earlier last two years back during May 2005, Singhania had said that his company would invest an amount of Rs 200 crore in next three years. The company, according to him, had already invested an amount of Rs 70-80 crore in the facility.

JK's Madhya Pradesh Plant at Banmore (Distt Morena) started production in 1991 with a capacity of 5.7 lakh tyres per annum, producing a range of tyres and passenger radials in particular.

State Industry Policy 2004 offers some exemptions for capacity expansion on entry tax, commercial tax and power cess if the investment on capacity expansion is 50 per cent of the first investment or minimum Rs 5 crore, whichever is more.

"Since Singhania had made Rs 400 crore investment in the Banmore plant, the size of capacity expansion is very low. But the cabinet will soon discuss provisions and will amend them. It may brought down the limit from 50 per cent to 25 per cent or even less."

The provisions also restrict small-scale units since they never attain the figure of Rs 5 crore mandated by the state government.

According to government insiders, the Amended Industrial and Employment Policy will have provisions for small-scale units to wherein the minimum limit of Rs 5 crore may be brought down to Rs 2.5 crore or even less.

RP Singhania had said it had plan is to invest an amount of approximately Rs 200 crore in the next three years to increase capacity from 2.2 million tyres to 3 million tyres.